Housing Trust Demands Full Financial Accounting For Boynton Meadows Loss
Thu, 05/21/2020 - 4:27pm Heraldgroton
Partnership Agreement Finally Released
by Russell Harris
The story below is based on a press release submitted by the Groton Affordable Housing Trust last Thursday. The release announces that the Trust is demanding that the Boynton Meadows developer provide a full financial accounting of the Town’s investment in the development, an investment that led to a $400,000 loss of town funds. The Trust made a similar demand of the Boynton Meadows project developer in a letter dated April 6, 2017 to no avail.
Nevertheless, perhaps the most significant news here - news not mentioned in the press release - is that along with the press release, The Affordable Housing Trust released the full partnership agreement, the foundational legal document, the basis for the town’s investment in the failed project. Prior to this release, the agreement had been secret and it was impossible to understand whether flaws in the agreement were a factor in the town sustaining this large, sudden loss.
The Groton Herald intends to take a careful look at the partnership agreement with the help of a knowledgeable professional to see if there are
any lessons that could be learned from the agreement and to report on this analysis after we have had a chance to better understand this document
According to a press release submitted last Thursday, The Groton Affordable Housing Trust has been meeting with outside Counsel and the Select Board to determine what happened to the town’s $400,000 investment in the Boynton Meadows project. More than 8 years after the original investment and years after the investment was declared a total loss, the Affordable Housing Trust is now demanding an accounting of the Boynton Meadows project’s financial performance as stipulated in the investor agreement between the Trust and the Boynton Meadows developer, dated March 22, 2012. As mentioned above, this partnership agreement has now been made public for the first time.
According to the press release, The Affordable Housing Trust says they “expect to receive a full accounting, covering the period ending April 30, 2020 by no later than June 5, 2020.”
There was a previous letter to the developer from the Affordable Housing Trust demanding a full return of the Town’s funds that did not lead to a substantive response. Therefore, an affirmative response to this request, almost three years later seems unlikely.
The Press release says that actions by The Boynton Meadows developer [Mount Laurel Development] with respect to this project have been "a source of concern for the Trust". The press release says, “To fulfill its fiduciary responsibilities, the Trust is taking all necessary steps afforded to them by the investor’s agreement to determine how taxpayer funds were expended on this project.”
Background Leading to the Investment in Boynton Meadows
In 2011, Groton Town Meeting approved the appropriation of Community Preservation Housing Funds for the Affordable Housing Trust to invest $400,000 in the Boynton Meadows Development. As has been reported in the Groton Herald, representatives of the Boynton Meadows project made verbal assurances of regular financial reporting and accountability on the floor of town meeting. These financial reports never happened.
Since the loss was announced, the Community Preservation Committee [CPC] made efforts to understand how the Boynton Meadows loss could have happened. However, because the Affordable Housing Trust was unwilling to share information, the CPC was unable to
The Groton Affordable Housing Trust signed an agreement with Mount Laurel Development, LLC, to invest in the project, which included creation of three affordable housing units. These affordable units were required under the terms of the zoning in place for that parcel of land so the affordable units would have been required with or without town participation. It was anticipated that the Trust would share in the profits of the project and receive a significant return on their initial investment. However, the Affordable Housing Trust did not receive any return on the investment and a short while later the total loss of the town’s investment was revealed.
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